Indosat to sell 2,500 towers for $519m

Dylan Bushell-Embling
09 Feb 2012
00:00

Indonesia's PT Indosat has announced it will sell 2,500 of its telecom towers to PT Tower Bersama Infrastructure, in a deal worth up to $519 million.

Under the terms of the deal, PT Indosat will sell the assets to Tower Bersama and a subsidiary, and then lease back the towers for at least 10 years at market rates.

Tower Bersama will pay the purchase price in both cash and new shares. Based on market prices, the deal is expected to result in Indosat owning around 5% of Tower Bersama stock.

Announcing the agreement, Indosat said it expects the sale to allow it to reduce maintenance costs and operational expenditure. The company plans to put the cash proceeds towards reducing debt and to help fund capital investment.

The deal still requires approval from Tower Bersama shareholders and other stakeholders.

Indosat and Tower Bersama have been negotiating the terms of the sale since November. At the time, reports suggested that PT Indosat hoped to sell around 3,000 towers.

Indosat is Indonesia's second largest mobile operator.

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